Mosler Economics

Not good: Said Yellen: “The long-run deficit probably needs to be kept in mind.”http://www.usatoday.com/story/money/2016/11/17/yellen-fed-track-dec-rate-hike/93991628/ http://www.bloomberg.com/news/articles/2016-11-17/yellen-signals-fed-won-t-be-cowed-after-trump-s-election-victory “In addition, with the debt-to-GDP ratio at around 77 percent there is not a lot of fiscal space should a shock to the economy occur, an adverse shock that did require fiscal stimulus,” she said....

Nice move up after a large move down. Note that the average of the last two months is about where this series has been. And, again, it’s the permits that count, and they are about the same as last month. And not to forget mortgage applications to buy homes fell a full 6% last week after rates went up in response to the election. Highlights In data that will lift estimates for fourth-quarter GDP, housing starts surged 25.5 percent in October to a 1.323 million annualized...

The big stupid continues uninterrupted from regime to regime: Documentary Of The Week: Stephen Bannon Explains America’s Problems By John Lounsburry Nov 15 (Econintersect) — Econintersect: This lecture was presented to the inaugural session of the Liberty Restoration Foundation in Orlando, FL October, 2011. Stephen Bannon, the CEO of Donald Trump’s successful presidential campaign and to-be Chief Strategist in the Trump White House, describes his view of what is wrong with...

With the Bernanke taper tantrum a housing market showing at least some signs of recovery immediately reversed course and headed south. The shale boom got things going again, and the shale bust saw some softening. But with the latest anticipatory spike in mtg rates and still not much underlying effective demand, we’re seeing the beginnings of another setback. This is the chart for the index for mortgage applications for home purchases: I haven’t yet seen any reason for a...

If rates were being raised due to excess demand for mortgages the higher rates wouldn’t likely slow things down. But in this case demand has been relatively low, so the jump in rates not due to demand will likely slow demand: Highlights Purchase applications for home mortgages fell a seasonally adjusted 6 percent in the November 11 week as a sharp increase in mortgage rates took its toll on application activity. The rise in rates had an even greater impact on refinancing,...

So if new hires are at the lowest end of the wage scale, a reduction in the growth of new hires increases the average growth rate? Also note the large ‘dip’ in growth to less than 2% from the last recession. The ‘lost wage growth’ doesn’t even begin to get ‘made up’ until the rate of growth exceeds the prior average of about 4%: Aggregate demand is still being lost as the cutbacks from the collapse of oil capex 2 years ago continue: U.S.-based energy companies announced plans...

Good report, driven by autos, which were up from last month though down from last year. However, on a year over year basis vehicles sales if anything seem to be moderately declining, and so won’t be contributing to growth as they had in the past. So a glimmer of hope here, but guarded to say the least: Highlights The consumer started the fourth-quarter better than expected and finished the third-quarter even stronger than that. Retail sales jumped 0.8 percent in October...

A bit of a Trump boost, but the general downtrend of the last couple of years is still intact: Retail Employment Gains Fall 21% From A Year Ago By Challenger Gray and Christmas Nov 10 (Econintersect) — Despite largescale hiring announcements from numerous major retailers, the number of October employment gains in the sector declined 21 percent from a year ago to 154,600. That was the fewest job gains to kick off the holiday hiring season since 2012. ...

Attached is an excellent piece on the euro zone by Professor Andrea Terzi Sales aren’t falling year over year but they aren’t growing at 5% as they would do in ‘normal’ times:In ‘normal’ times inventories increase with sales, adding to output. But when sales slow inventory growth stops and reverses: I like this headline:

The Saudis set prices via discounts to benchmarks, which will trigger either price appreciation or depreciation, or, if they happen to get the discounts ‘exactly neutral,’ at least near term stability. They then allow their clients, who are all refiners, to buy all they want at the posted prices. To date the total purchased has been less than their presumed 12 million barrel per day production capacity. the chart shows that the price cut a couple of years ago, from over $100...